Govt commits Rs. 7,385 crore under Fund of Funds for Startup India Investment for 88 Alternative Investment Funds (AIFs)

Source: The post is based on the article “Govt commits Rs. 7,385 crore under Fund of Funds for Startup India Investment for 88 Alternative Investment Funds (AIFs)” published in PIB on 26th September 2022

What is the News?

Fund of Funds for startups has committed Rs 7,385 crore to 88 alternative investment funds (AIFs). These AIFs in turn have invested Rs 11,206 crore in 720 startups.

What is the Fund of Funds for Startups(FFS)?

Launched in: 2016 under Startup India Initiative.

Nodal Ministry: Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry.

Aim: To increase capital availability as well as to catalyze private investments and thereby accelerate the growth of the Indian startup ecosystem. 

Corpus: The fund was announced with a corpus of Rs. 10,000 crores. The corpus is to be built up over the 14th and 15th Finance Commission Cycles through budgetary support.

Features: FFS does not invest in startups directly but provides capital to SEBI registered Alternate Investment Funds(AIFs) known as daughter funds which in turn invest money in high-potential Indian startups. 

Managed by: SIDBI has been given the mandate of managing the FFS through the selection of daughter funds and overseeing the disbursal of committed capital.

Significance: FFS has not only made capital available for startups at the early stage, seed stage and growth stage but also played a catalytic role in facilitating the raising of domestic capital, reducing dependence on foreign capital and encouraging homegrown and new venture capital funds.